Death is not a life event you can skip - and the cost is rising

By Jessica Hall

'People end up going into debt while also trying to grieve'

Dying is expensive.

Whether you opt for a formal burial or direct cremation, there are unavoidable costs involved in dying.

The median cost of a burial in 2023 was $9,995 - a 6.1% increase since 2021, according to the National Funeral Directors Association. That figure included the costs for everything prior to burial, including a casket, but did not include the cost of a cemetery plot, nor a monument or gravestone marker.

The median cost of cremation, with a container and urn, in 2023 was $6,280, up 8.1% from 2021. That does not include the cemetery and marker. Over the same period, the U.S. inflation rate was 13.6%, the NFDA said, citing the U.S. Department of Labor.

If you add in the cost of a cemetery plot, which varies widely from city and state and depends on the size of the plot, plus the interment costs of the opening and closing of the grave, burial permits, grave liners as well as perpetual care or grounds keeping fees, the bill for dying starts to add up. Obituaries or death notices and flowers are extra.

"Everyone has to pay something to handle the body. It's a consumer cost that you can't opt out of. It's not like a life event like a wedding that you can skip. You don't have to have a huge service, but you have to do something," said Suelin Chen, chief executive of Cake, an online platform for end-of-life planning and bereavement support.

Empathy, a company that offers grief support and assistance in settling estate matters, cited other expenses that loved ones face after a death. Legal matters, such as lawyer's fees and court filing fees, cost an average of $2,788, and the cost of hiring a real estate agent and preparing the home for sale cost an additional $2,724.

"Costs - and individual preferences - are causing people to make different decisions," Chen said. "Cremation is less expensive, and that's one of the factors that's driving growth."

In 2015, the national cremation rate surpassed the casketed-burial rate for the first time in U.S. history and hit 60.5% of all deaths in 2023, according to the NFDA. By 2045, the cremation rate is projected to grow to 81.4%.

The shift towards cremation also has been driven by other factors such as the population's transitory nature, a decrease in organized religion, changing consumer preferences and environmental concerns, according to an NFDA report.

Randy Anderson, funeral director of Radney Funeral Home in Alexander City, Ala., said cremation represented about 60% of the deaths handled over the past year - the highest rate he's ever seen for his funeral home.

Anderson said the decision to cremate is not driven by costs as much as by personal or family preferences. Most families still opt for some sort of ceremony or service to remember and honor the life of the deceased, even if the loved one is cremated, he said.

"You have to find funerals at any cost for any budget," Anderson said. "The community still expects a service. People still ask. We'll still get the phone ringing asking when the service is. A lot of times we forget that the community wants to pay their respects and start on the grief process."

While Anderson's client base tends to opt for more traditional services - whether it's a formal burial or cremation - some customers do ask about alternative burial methods often just to know what their options are, he said.

Most Americans (60.5%) would be interested in exploring green funeral options because of their potential environmental benefits, cost savings or for some other reason, according to the NFDA.

Environmentally friendly or alternative options for funerals are varied and include planting a tree with cremated remains, creating soil out of human remains, or even creating a tattoo with ink infused with cremated remains.

Read: What should I do with my body when I die? The options go way beyond burial and cremation.

Such options remain a small niche of the industry. The green-funeral market globally is only $572 million, according to Emergen Research. That was a small figure compared to the U.S. funeral industry alone, which takes in about $20 billion per year, according to Marketdata LLC.

"There's a big gap between people's wants and what's happening. If you don't plan ahead, the knee-jerk reaction is to call the funeral home, which is not the full service of options available to you," Chen said.

Comparison shopping or finding prices currently can be difficult as funeral homes aren't required to post their services and rates online.

The Federal Trade Commission has collected public comment and is reviewing whether to require funeral homes to post their prices online. No decision has been made. The original funeral rule, which became effective in 1984, and was amended in 1994, predates broad consumer use of the internet and currently only requires price disclosure when a consumer visits or telephones a funeral home.

Read: Do you want your funeral to be a Porsche or a Hyundai? Funeral homes may have to post prices online for the first time.

Given that half of Americans have less than $500 in savings, according to GOBankingRates, the cost of a funeral can be a hefty, often unexpected, expense.

"People are crowdsourcing for funerals, draining IRAs, going into debt. People are hit with a little sticker shock. Some people expect to get some money back from the estate, but that can be less than what's expected or there's a delay in getting the money," Chen said.

While there are things that consumers can do to lower funeral-related costs, such as hosting the funeral at home, buying a casket online directly from a manufacturer, having a direct cremation or doing a green burial, but awareness is slim, Chen said.

"So people end up going into debt while also trying to grieve," Chen said.

-Jessica Hall

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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01-23-24 1034ET

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